9/2/2010
Ottawa, September 2, 2010 ― Choosing the right credit card can be a challenge. There are hundreds of different credit cards to choose from, each offering a different combination of interest rates, fees, benefits and rewards.
The Financial Consumer Agency of Canada (FCAC) has updated its credit card publications to help consumers make informed choices when they apply for a credit card. “Whether you want to learn more about credit card fees, understand your rights and responsibilities as a cardholder or find the right card, these new publications will likely give you the information you need,” according to Ursula Menke, FCAC’s Commissioner.
“Credit cards can be a convenient and safe way to pay for purchases and services. Some also offer benefits and rewards. But, they can encourage buy now, pay later spending habits that may lead to financial trouble. Carrying a balance on a credit card increases the cost of everything you purchase with the card due to the amount of interest you pay. If you pay off your balance every month, you save those interest charges and you are essentially getting free credit,” added Commissioner Menke.
Here’s how to make your credit card work for you:
- Pay off your balance every month. This means you won’t pay any interest charges on your credit card purchases.
- Avoid using your card to withdraw cash or transfer money with it. Interest is charged on these transactions immediately.
- If you do carry a balance, pay as much as you can as quickly as you can. You don’t have to wait until the payment due date. Our Credit Card Payment Calculator shows you how much you save when you pay more than the minimum monthly payment.
- If you are looking at a card with an annual fee, be sure whatever reward or benefit you’re getting is worth the cost. The recently updated FCAC Credit Card Selector Tool has details on approximately 250 credit cards available in Canada, including more than 70 that charge no annual fee, as well as premium and specialized cards.
- Stay within your budget when you use your card so you don’t buy things you can’t afford.
Resources for consumers
FCAC has several resources to help consumers make choices about credit cards. The tip sheet, Be Smart with Your Credit Card, lists more ways to use your card wisely.
Our updated publications also reflect new credit card regulations that came into force this year, including some yesterday. Plus, Ashley Reid, a young accountant, talks about how the Credit Card Payment Calculator helped her save money on credit card interest and fees in this Success Story.
Using educational materials and interactive tools, FCAC provides consumers with objective information about financial products and services and informs them of their rights and responsibilities when dealing with banks and federally regulated trust, loan and insurance companies. Through its financial literacy program, FCAC also helps Canadians acquire the necessary knowledge and confidence to manage their personal finances. FCAC also makes sure that federally regulated financial institutions and payment card network operators comply with legislation and agreements intended to protect consumers.
You can reach us through the FCAC Consumer Contact Centre by calling toll-free 1-866-461-3222 (TTY: 613-947-7771 or 1-866-914-6097) or by visiting our website: fcac.gc.ca.
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Media relations:
Julie Hauser
Media Relations Officer
613-941-4168
julie.hauser@fcac-acfc.gc.ca
